The improving economic climate and ongoing popularity of Wales as a tourist destination is helping to make Welsh hotels and hospitality businesses an attractive proposition for purchasers, with property advisers Christie + Co reporting growth in buyer demand for hotel businesses across South and Mid Wales.
The latest statistics released by the Welsh Assembly Government (June 2014) illustrate this popularity as a tourist destination with 9.6 million overnight visitors in 2012 with 62% of those coming for a holiday.
As the economy continues to recover, the public’s perception of the economy is improving and the rate of hotel room occupancy is rising. The STR UK Hotel Review for August illustrates this trend. The review shows an occupancy rate increase of 7.4% for Cardiff hotels over the corresponding period in 2013.
A similar effect is being seen across South Wales with the ‘Wales Accommodation Occupancy Survey’ produced by Statistics for Wales showing an increase in occupancy rates for South East and South West Wales of 7% and 12% respectively over the previous year.
As occupancy rates have risen, so has the economic performance of operators in the sector with the STR UK Hotel Review for August showing positive growth for the year to date in both Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR) of hotels in Cardiff. ADR increased 8.8% and this, combined with the increase in occupancy, led to an enormous 14.4% increase in RevPAR for the year to date in comparison to 2013.
As confidence in the sector and performance by operators improves, buyer demand for businesses increases. In particular, Christie + Co has seen a number of experienced local operators become acquisitive and confident in their ability to turn a profit in an improving economic climate. A recent example of this is the sale brokered by Christie + Co of the Gellifawr Hotel and Cottages in Pembrokeshire. The business was purchased by a successful hotelier already operating in the sector within the region who recognised the potential of the business and felt confident in their ability to make it profitable.
John Coggins of Christie + Co’s Cardiff office comments: “The Welsh hotel market is incredibly varied with international, national and owner-operators all operating in the Principality. Christie + Co has fifteen offices across the UK encompassing our growing office in Cardiff as well as thirteen offices in Europe, so we are well placed to help operators of all demographics dispose or acquire businesses in Wales.”